Kurdistan Regional Government (KRG) has paid oil operators for the first time in 7 weeks. In a recent announcement, oil companies DNO ASA, Genel Energy Plc and Gulf Keystone Petroleum Ltd received a combined sum of US$53.9 million for oil sold during October, yet companies are still due November and December exports from the KRG.
This payment from KRG comes long after the previous and is a pattern that oil operators have become accustomed to as various factors have not allowed KRG to make regular payments for oil exports. A failure to come agree to an oil sharing agreement with Baghdad and geopolitical conflict in Kurdistan have also halted timely payments for government workers in addition to oil operators.
However, since OPEC members agreed to a freeze in oil production in December,oil prices have gone up 20 percent and companies have set up a new payment schedule with KRG that will support the drive to have a steady cash flow in order to invest in and boost oil production. DNO ASA alone was due US$1 billion in arrears. DNO is the main operator in Tawke oil field (108,122 bpd) and received $US38.9 million from KRG that will be shared with Genel Energy. Gulf Keystone Petroleum received US$15 million from oil sold from the Shaken fields. Cenkos Securities Plc said in a recent statement, “payment is welcome, although they are taking longer to be received…the element of back-costs remains small and isn’t making a huge dent in the receivable.”